GM has announced a limited time voluntary separation program (VSP) as part of an ongoing effort to reduce fixed costs and achieve $2 billion in cost savings over the next two years.
Per a statement from GM spokesperson David Barnas, the new GM VSP will be available to all U.S. salaried employees with at least five years of service, and all global executives with at least two years of service.
“This voluntary program offers eligible employees an opportunity to make a career change or retire earlier,” Barnas said. “We are offering three packages based on level and service to the company. Employees are strongly encouraged to consider the program.”
U.S. salaried employees with at least five years of service are eligible for 1 month of pay for every year of service (up to 12 months) and COBRA, as well as a pro-rated team GM performance bonus and outplacement services. Meanwhile, all global GM executives with at least two years of service are offered their base salary, incentives, COBRA, and outplacement services.
Eligible employees must sign up for the new VSP by March 24th, 2023. Those who elect to take the VSP will depart the company by June 30th, 2023.
The announcement of the new VSP follows a report that GM was implementing a new round of job cuts affecting “a relatively small number of salaried employees and executives,” with roughly several hundred jobs eliminated, primarily in the U.S.
In addition to reducing salaried staff through attrition, GM’s efforts to reduce fixed costs also include a reduction in vehicle complexity and the wider use of shared subsystems between ICE-based platforms and future electric vehicle programs. GM states that it is also focusing investment in growth initiatives to accelerate near-term benefits, and decreasing discretionary spending across all parts of the company.
“By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market,” Barnas said.